Toyota profits fall 37% between April and June due to US tariffs

Toyota Motor's net profit fell 37% between April and June, the first quarter of the Japanese fiscal year, mainly due to US tariffs, the impact of which the Japanese company estimated at 450 billion yen (2,618 million euros).

The taxes applied since April by the US administration of Donald Trump significantly reduced the net profits of the world leader in the automotive sector, which fell to 841.345 billion yen (4.895 billion euros), as well as its operating profit, which fell 11%, to 1.16 trillion yen (6.749 billion euros), according to the results presented today.

The Japanese giant's sales revenue, on the other hand, grew 3.5%, to 12.25 trillion yen (71.271 billion euros).

Toyota sold a total of 2.41 million vehicles worldwide between April and June, a 7% increase compared to the same period last year, and saw increases in nearly all of its markets, including North America.

The drop in profits is mainly attributed to “the impact of US tariffs and other factors,” Toyota explained in a statement, where it also indicated that these circumstances led to a downward revision of its earnings estimate for the current fiscal year, which will end in March 2026.

The Aichi (central Japan)-based company expects net profit to fall 44% over the year to 2.66 trillion yen (15.476 billion euros) due to the continued impact of tariffs.

The automotive giant's estimates also point to a 33% drop in operating profit, to 3.2 trillion yen (18.618 billion euros), and a 1% increase in sales revenue, to 48.5 trillion yen (282.174 billion euros).

Toyota's calculations include a negative impact from Trump's tariffs of 1.4 trillion yen (8.145 billion euros) for the entire fiscal year.

While the first-quarter results included the additional 25% tariffs applied by the United States to Japanese vehicle imports since last April, the estimates for the full year are based on the assumption that, starting in August, Washington will reduce this additional rate by 12.5%, to 15%, the company explained.

"Despite all the external challenges, we will continue to make extensive investments and improvements aimed at increasing vehicle sales, reducing costs and increasing profits across the value chain, thus minimizing negative impacts," Toyota said.

Toyota's quarterly results were released on the same day that new 15% US tariffs on all Japanese imports came into effect, which will also affect the auto sector, although Tokyo says the exact date of implementation of this new rate is unclear.

Since last April, Japanese automakers have faced total tariffs of 27.5% on their sales to the United States, which for many of them, including Toyota, represents their main market.